Fujitsu Microelectronics, Inc. v. Assessment Appeals Bd. of San Diego

Opinion

JONES, J.

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Appellant Fujitsu Microelectronics, Inc. (hereafter Fujitsu) appeals a judgment in favor of the Assessment Appeals Board of the County of San Diego (hereafter the Board).

Fujitsu sued the Board on December 14, 1993, claiming a refund of property taxes imposed for the tax year 1992-1993. Fujitsu had filed an administrative claim for reduced assessment with the Board on August 27, 1992, which was denied following a hearing on March 18, 1993. The claim asserted that the San Diego County Assessor (hereafter Assessor) applied improper depreciation rates for certain personal property and fixtures of Fujitsu.

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Fujitsu contends an accelerated depreciation rate on its personal property is warranted, based on a study of depreciation rates of semiconductor

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manufacturing equipment by Arthur D. Little, Inc. (hereafter the ADL report). The Board refused to admit the ADL report into evidence, but the substance of the report was pursued through the testimony of Fujitsu’s representative at the hearing. Essentially, the report concludes that semiconductor property depreciates more rapidly than other types of personal property. Fujitsu contends that ignoring the depreciation rates reflected in the ADL report resulted in an arbitrary determination.

Fujitsu also contends that the depreciated value of the fixtures as of the lien date, March 1, 1992, was improperly set above fair market value. About six months after the lien date, Fujitsu announced its intention to close its manufacturing plant and, shortly thereafter, closed the plant. Fujitsu claims this event caused a plunge in the market value of the plant’s fixtures which should have been reflected in the assessment of their value for tax purposes.

The Board rejected Fujitsu’s assessment contentions, as to both personal property and fixtures. It concluded that neither the ADL report nor the plant closure was germane to the proper assessment of market value and Fujitsu’s evidence was insufficient to overcome the presumption under California Code of Regulations, title 18, section 321 (hereafter section 321) that the assessment was fair and equitable. No evidence was received from the Assessor.